As U.S. plastics production grows, Gulf Coast companies...

An ethylene unit is shown at the Chevron Phillips Chemical Company's Cedar Bayou Plant﻿ in Baytown.

Photo: Melissa Phillip, Staff

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LyondellBasell employee Claudio Bertoni works on the development of the next generation of polyethylene﻿.

Photo: LyondellBasell

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Containers await their next journey at Port Houston's docks.

Photo: Bill Montgomery

The U.S. is awash in far more plastic than it needs, so chemical companies along the Gulf Coast are seeking more buyers abroad as production continues to skyrocket.

The push to sell billions of pounds of polyethylene, the world's most common plastic, is sending local producers on a hunt for new markets amid a local petrochemical boom driven by the abundance of cheap natural gas flowing from West Texas. Analysts expect another surge in plastics exports, which could drive down prices as companies flood markets with excess inventory.

Polyethylene is used to make bottles, containers and a range of consumer products. It's manufactured in the U.S. using ethane, a natural gas liquid used as a feedstock for ethylene, which is the building block for most plastics.

ICIS, a global energy and petrochemical research firm with offices in Houston, reported that U.S. manufacturers added 3.5 million tons of polyethylene production capacity last year with new facilities designed to capitalize on the ongoing shale boom in the Permian Basin and elsewhere. A steady supply of ethane has enabled U.S. producers to churn out polyethylene at a steep cost advantage to Asian and European manufacturers that typically use heavier, more expensive feedstocks made from crude oil instead of natural gas.

ExxonMobil Chemical Co., a unit of the oil major, last year transformed its massive Mont Belvieu polyethylene facility into one of the largest in the world by adding two production lines that nearly doubled output. The plant now has the capacity to produce 2.5 million tons of polyethylene annually, much of which is shipped to overseas markets through the Port of Houston.

LyondellBasell, the Houston petrochemical company, is also expanding polyethylene production at its La Porte complex with a $700 million plastics plant. The facility, expected to open next year, will have the capacity to produce more than 500,000 tons of polyethylene a year.

Much more is on the way. ICIS anticipates that the U.S. will increase its polyethylene production by nearly 75 percent over the next five years, jumping by 6.5 million tons a year by 2019 and 12.1 million tons a year by 2022.

Domestic demand, meanwhile, is expected to grow far more slowly than production, said ICIS deputy managing editor Zachary Moore. That dynamic is driving producers to look to new markets in Europe and developing countries in Asia, where plastics consumption is growing alongside a rising middle class.

"Exports are going to become much more important," Moore said.

Producers also see opportunity to export ethylene to countries expanding their plastics production capabilities. S&P Global Platts anticipates North American ethylene production, which reached 32 million tons a year in 2016 to increase more than 35 percent to top 44 million tons by 2026.

Enterprise Products Partners recently announced plans for a joint venture with the British shipping company Navigator Gas to build a new ethylene export facility along the Gulf Coast. The facility, expected to begin operations in 2020, will have the capacity to export approximately 1 million tons of ethylene per year.

In a conference call with analysts, Jim Teague, CEO of Enterprise's general partner, noted that Texas and Louisiana are poised to lead the world in ethylene production, thanks to the major investments throughout the region in plants that process ethane into ethylene. He said that expansion, combined with increased international demand in Asia and elsewhere, creates an "ideal scenario" for selling U.S. feedstocks abroad.

"With the continuing increases in production, more and more products are being exported," he said.

Katherine Blunt joined the Houston Chronicle's business desk in August 2016 and now covers refining, petrochemicals and LNG. Before joining the Chronicle, she covered transportation for the San Antonio Express-News. There, she wrote about infrastructure funding, urban planning and transit development. She also unraveled the murky investment structure underpinning the first public-private toll road in Texas. She grew up in Maryland and attended Elon University, where she majored in journalism and history.